“Asset bubbles bursting, IT infrastructure breaking down, price instability and debt crises loom in the next five years as the coronavirus pandemic leaves behind a “lost generation” of young people facing an increasingly precarious future.
“These are the stand-out mid-term warnings in the World Economic Forum’s Global Risks Report 2021…”
“The debt question facing Janet Yellen: How much is too much? In the past four years, US government debt held by the public has increased by $7 trillion to $21.6 trillion…
“The IMF study’s authors have another warning about running large deficits. Fiscal-policy crises that push interest rates sharply higher tend to come out of nowhere, even when rates are low. “Market expectations can turn quickly and abruptly,” the authors, Paolo Mauro and Jing Zhou, concluded.”
“Print or collapse – The only trick left in the bag for the Government to keep the economic and financial system from complete collapse will be the implementation of massive “stimulus” programs…
“The dollar has lost 98% of its value vs gold since 1971.”
https://seekingalpha.com/article/4399584-money-printing-money-printing-and-money-printing
“The money created by the Fed is [now] not going only into excess reserves of the banking system. It is going directly into the bank accounts of individuals and firms through the US Paycheck Protection Program, stimulus cheques, and grants to state and local governments, [which is inflationary]…
“…there is no such thing as a free lunch. It will be the Treasury bondholder, through rising inflation, who will be paying for the unprecedented fiscal and monetary stimulus over the past year.”
https://www.ft.com/content/6536113f-f509-41e2-bee0-597ed90843b6
“Warning signs are flashing red for the UK’s property market, as key indicators suggest house prices could plunge by more than 6pc.
“Property values could even start to fall before the stamp duty holiday comes to an end on March 31, experts have warned. The return of the tax is expected to accelerate the slump and cause tens of thousands of sales to collapse, as buyers pull out of purchases that suddenly become unaffordable.
“This will come as Britain’s economy enters its most fragile phase.”
“New car sales in Europe dropped by nearly a quarter in 2020 as the Covid-19 pandemic provoked the worst crisis ever to hit the European car industry.
“Registrations plunged by 23.7 per cent, or three million vehicles, to 9.9m units.”
“Euro zone finance ministers pledged continued fiscal support for their economies on Monday and discussed the design of post-pandemic recovery plans as the European Commission warned the COVID crisis was making the bloc’s economic imbalances worse.”
“Eurozone banks scaled back lending to businesses and households late last year as a resurgence in coronavirus cases across the single currency bloc prompted fresh lockdowns which fuelled fears of rising bad debts, according to a European Central Bank survey.
“In the final quarter of 2020, banks tightened their lending guidelines and approval criteria for new loans to businesses by the most since the 2008 financial crisis and several of them expected to rein in access to credit further in the first quarter of this year…”
https://www.ft.com/content/71990315-d346-40bb-81db-52b7f6e58517
“India’s troubled shadow banks face mounting challenges to a nascent recovery from the pandemic, with their asset quality set to deteriorate further as flagged recently by the financial regulator.
“Non-performing assets already swelled in the most recent data to the highest in at least five years, at 6.3% as of March 2020 even before the worst of the pandemic impact…”
“The cost of shipping goods from China to Europe has more than tripled in the past eight weeks, hitting record highs as a shortage of empty containers stemming from the pandemic disrupts global trade.
“The cost of shipping a 40-foot container from Asia to northern Europe has increased from about $2,000 (€1,648) in November to more than $9,000, according to shippers and importers.”
“Swiss authorities have requested that Lebanon’s judiciary cooperate with a money-laundering investigation into the country’s central bank, in the latest blow of confidence to the insolvent financial institution…
“The probe centers on $400m in transfers allegedly tied to the bank’s governor of 27 years, Riad Salameh, his brother Raja, and Salameh’s advisor Marianne Al-Hoayek…”
“Violent clashes erupted for a fifth night on Tuesday between police and protesters in several Tunisian cities, including the capital Tunis and Sidi Bouzid, the cradle of the Arab Spring uprisings, as anger and frustration mount over economic hardship.
“Earlier in the day, protesters rallied in Tunis, reviving the chant that rang a decade ago in a revolution that ushered in democracy:
“”The people want the fall of the regime.””
https://middle-east-online.com/en/violent-protests-break-out-fifth-night-tunisia
“African central bankers meeting in the next two weeks amid a resurgent coronavirus may find they’ve used up most of their interest-rate ammunition to lift their economies out of recessions that still affect much of the continent.”
“Militant attacks that have forced hundreds of thousands of people to flee their homes in Mozambique’s northern Cabo Delgado province have created a humanitarian crisis, the U.N. World Food Programme (WFP) said on Tuesday.
““What is happening is nothing short of a food security and nutritional crisis,” WFP spokesman Tomson Phiri told a U.N. briefing.
““This is a humanitarian disaster.””
“Clashes between rival ethnic groups in Sudan’s South Darfur state have left 55 people dead, a day after more than 80 people were killed in separate clashes elsewhere in the restive region…
“Key issues include land ownership and access to water.”
https://www.aljazeera.com/news/2021/1/18/47-killed-in-sudan-s-darfur-fighting-local-leader
“Almost a quarter of Lesotho’s population will require food aid between January and March as a result of Covid-19 restrictions, the UN Food and Agriculture Organization (FAO) has warned.
“More than 580,000 people out of a population of 2.2 million are estimated to be food insecure…”
“According to the new figures, over 18 million people in Afghanistan, including 9.7 million children, are desperately in need of life-saving support, including food, Save the Children said in a statement.
“The group called for $3 billion in donations to pay for assistance in 2021.”
“North Korea on brink of famine as secretive state further cuts itself off from the world:
“Observers warn of repeat of ‘Arduous March’ of 1990s when millions died of starvation… the food situation for many North Koreans is clearly extremely precarious.”
“If climate change continues unabated, we face a fight for food supplies that echoes our current battle for vaccines.
“The global price of corn is up more than 60pc in six months and wheat prices are up nearly 40pc. This is adding to fears about a surge in global inflation…”
“Time to look again at the financial system’s dangerous faultlines:
“The west cannot afford another financial crisis. It would be a disaster in every possible way…
“Last March and April, the fabric of our financial system was stretched almost beyond endurance…”
https://www.ft.com/content/0d848d03-7d66-4a76-a4f2-8f09980747fa
You can read the previous ‘Economic’ thread here. I’ll be back tomorrow with a ‘Climate’ thread.
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